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Former defence minister Manohar Parrikar today said the consultancy deal with a South Korean firm for building minesweepers for the Indian Navy could not be finalised because its tender didn't meet the prescribed terms and conditions.
A dozen mine countermeasure vessels (MCMVs) or minesweepers were to be built at the Goa Shipyard Ltd (GSL) in collaboration with the South Korean firm Kangnam Corporation.
The GSL was given the Rs 32,000-crore project when Parrikar was the defence minister.
However, negotiations with Kangnam hit a dead-end and the government has now decided to start a fresh process to procure minesweepers.
Responding to a question at a press conference here, Parrikar said only the role of the consultant in building these vessels has been cancelled by the defence ministry, and not the order given to the GSL, a Public Sector Undertaking.
"What is cancelled is the role of a consultant. (That) particular consultant's tender was not as per the rules and regulations. So they (the defence ministry) are re-floating it," he said.
"The exercise carried out by the Goa Shipyard (to finalise the deal) could not be completed because of certain terms and conditions by the Korean company," he said.
To build minesweepers, one requires certain technology as the boats are built with fibre glass or non-metallic substance, said Parrikar, now the chief minister of Goa.
"That technology is not available with India," he said
"What is cancelled is the process to select the collaborator. It is consultant's tender which is being re- floated and not the order given to the Goa Shipyard.
"We need those minesweepers urgently and selection of the new consultant has to be done very fast," he said.
On suggestions that a delay in finalising the new contractor would prolong the construction of minesweepers, he said, "These are projects which are drawn over 8-10 years and they can absorb this kind of delay. The delay of up to one year can be absorbed."
Two days back, GSL Chairman, Rear Admiral (retd) Shekhar Mital had told PTI, "We will issue fresh EoI (Expression of Interest) for the project very soon. It will be issued this month."
Sources have said the GSL had to call off the negotiations with Kangnam following differences over a host of issues including terms and conditions for technology transfer.
The EoI is likely to be issued to a number of foreign defence majors which build minesweepers.
According to original understanding, the GSL and Kangnam were to build 12 minesweepers under the 'Make in India' initiative of the government. However, both sides struggled to finalise various key aspects of the project.
The minesweeper ships detect and destroy underwater mines and are considered vital for keeping the critical sea lanes safe.